10 
profit of £10 over the second. He would thus 
he £30 out of pocket over the joint transac 
tions, and his capital distribution would have 
failed in its object. Whereas, if he had 
invested £500 in each stock, then the loss on 
the first stock would have been counter 
balanced by the profit on the second, and his 
capital distribution would have proved its 
practical utility. 
Of course, the point might be raised that 
supposing the respective movements of the 
two stocks had been exactly reversed, and the 
£800 investment had risen and the £200 
investment had fallen, in such a case the very 
irregularity of the distribution would have 
contributed to an increase of profit. But 
this result of an unsound investment policy 
in no way disproves the fact that unsound 
investment policies invariably result in a final 
catastrophe. Unequal investment of this 
nature, where the result is left to chance, is 
nothing more than speculation. In fact, a pur 
chase of securities as in the illustration given 
above is not an investment at all ; as far as 
£600 of it is concerned, it is a speculative risk 
against which no provision has been made. 
The main object of sound investment is to 
safeguard capital against loss, and this object 
can only be attained by a refusal to jeopardise